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APPLETON - The plan for U.S. Venture to build a $54.5 million corporate headquarters in downtown Appleton depends on the city's ability and willingness to build a $25 million underground parking ramp on the site.

John Schmidt, president and CEO of U.S. Venture, made that crystal clear to aldermen.

"Quite honestly, if we can't resolve it, we're going to have to look at other options," Schmidt told the Common Council during a special meeting last Monday. "I also heard that there's a belief that we don't have other options (for the company's headquarters). I'm telling you, we have better options already in place. All we have to do is act on it."

Schmidt said aldermen shouldn't take his comments as a threat but as an assessment of the situation. "I think you guys all need to hear how the land lies so you know what it is you're deciding," he said.

The multistory U.S. Venture building, combined with the public parking ramp, would be one of the largest investments in downtown Appleton in the city’s history. It would be located on what is known as Bluff Site 1, a four-acre area that includes the former Fox Banquets and Rivertyme Catering property.

The council is being asked to modify a development agreement signed in December by U.S. Venture, the city and One Lawrence Street, a developer led by Paul Hoffman and John Pfefferle.

That agreement called for the developer to build a four-level, 625-stall parking ramp underneath the U.S. Venture headquarters and, upon completion, for the city to buy and own the ramp.

The developer had difficulty financing the ramp at an acceptable interest rate, so the city now is being asked to build it.

"The cost of your money is cheaper than the cost of the developer's money," Schmidt told the council.

U.S. Venture, in turn, has offered to raise the guaranteed minimum value of its headquarters from $49.5 million to $54.5 million. It also has agreed to purchase 400 parking permits annually, instead of 300, in the ramp.

Aldermen, acting as a committee-of-the-whole, voted 14-0 in favor of the changes.

"I like the fact that we control the ramp now," Alderman Joe Martin said.

The council will vote on the amended agreement Wednesday.

Alderwoman Kathleen Plank said the new deal has "significant financial consequences, in the short-term anyway, for the city."

Plank said officials have determined Appleton could "cash flow" the cost of the underground ramp, provided it doesn't exceed $27 million.

"We really need to do our best to cap the expenses of that ramp," she said.

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John Schmidt, president and CEO of U.S. Venture, speaks before the start of the U.S. Venture Open. Schmidt told the Appleton Common Council that U.S. Venture wants to be a part of downtown Appleton, but he wants a clear picture of the city's commitment.(Photo: Danny Damiani/USA TODAY NETWORK-Wisconsin)

Schmidt said a cap on the cost of the ramp equates to a "no-go" for U.S. Venture.

"We as a business can't go forward wondering if the ramp underneath our building is going to be completed," Schmidt said. "Think about the situation that puts us in. ... It can't stall once you hit $27 million. That does not work for us."

A motion to have the city and U.S. Venture equally split any ramp costs in excess of $27 million failed by unanimous vote.

Schmidt said the financing difficulties related to the ramp already have pushed the completion date of U.S. Venture's building to January 2022. It had been targeted for 2021.

U.S. Venture distributes and markets energy, automotive and lubricant products. It wants to relocate to downtown Appleton, Schmidt said, but the company also could expand on its existing site in Kimberly.

"The cheapest, fastest, best thing for us to do, by far, is to build on the land that we're on right today," he told the council. "We have 21 acres of land. We're using 11 of them. We have plenty of room for this expansion. We want to come downtown, but it is to the point where we just need to know. We need to know if it's going to happen or not."

Karen Harkness, Appleton's director of community and economic development, said U.S. Venture initially would bring 400 employees to downtown Appleton and has plans "to grow to 1,000."

Mayor Tim Hanna signaled his faith in joint development.

"I remain optimistic that we can constructively work to achieve an outcome beneficial to all parties and have a major project for our city that we can all be excited about," Hanna said in a memorandum to the council.

U.S. Venture project in detail

As revised by the Appleton Common Council, the development agreement consists of the following elements:

U.S. Venture will build a new corporate headquarters on or near a four-acre downtown property known as Bluff Site 1.

Appleton will build and own a multilevel underground parking ramp beneath the U.S. Venture building. The public ramp will have 625 parking stalls and will cost an estimated $25 million. The total includes $1.8 million to acquire the property.

Appleton will pay $8 million to U.S. Venture to support the development. The city's investment will be recovered through a tax incremental financing district.

Appleton will acquire and clear the Mosaic Family Health property at 229 S. Morrison St. within three years for use by U.S. Venture. The city also will provide 1,000 parking stalls for use by U.S. Venture, including those in the underground ramp.

U.S. Venture will guarantee an annual property tax payment of $1,274,755, which is based on a minimum property value of $54.5 million. That's the value necessary to ensure the development generates a tax increment sufficient for the city to recover its costs.

U.S. Venture will buy at least 400 parking permits annually in the ramp at a discounted rate.

Hoffman Planning, Design & Construction will be retained by U.S. Venture and the city as the architect and construction manager of the joint project.

The city will work to change the address of the U.S. Venture headquarters to One Better Way.

The development agreement also states the project wouldn't occur without the use of tax incremental financing and without $20 million in tax credits granted to U.S. Venture by the Wisconsin Economic Development Corp.